GEORGE OSBORNE came under further pressure today over the ‘sweetheart deal’ on Google’s tax bill, with the EU ready to launch a probe investigating the controversial agreement.

George Osborne hailed a deal with Google as a 'major success' - but now the EU could launch a probe

Last week it was announced the internet giant had finally stumped up £130million in tax to HMRC covering the last 10 years, following a long-running row.

Chancellor George Osborne hailed the agreement a “major success” but critics blasted the sum as “paltry” and asked why the firm had been allowed an “effective tax rate" of just three per cent for the past decade, although the Government disputes this figure.

It also emerged both Italy and France are poised to strike much tougher tax deals with the American firm, despite the two countries being much smaller markets for Google than Britain.

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Google today insisted it is “paying the full amount of tax that HM Revenue & Customs agrees we should pay” but the EU could now launch a probe into its tax payments in Britain.

The SNP have asked the European Commission to investigate the settlement, with Labour also believed to be ready to complain to Brussels officials over the deal.

The EU’s competition commissioner Margrethe Vestager had earlier confirmed she will “take a look” if she was written to with a complaint.

Asked whether she was ready to announced a probe, Ms Vestager told BBC’s Radio 4 Today programme: “That is way too early to say because I don't know the details of the deal.

"If we find there is something to be concerned about, if someone writes to us and says this is maybe not as it should be, then we will take a look."

Ms Verstager also branded so-called "sweetheart deals" for big companies "unfair" and warned they could amount to illegal state aid.

GETTY

Google executive Peter Barron defended the settlement

Working people and small and medium businesses do not have the luxury of negotiating down the amount of tax they have to pay

SNP economy spokesman Stewart Hosie

HMRC bosses and Google chiefs will be grilled on the deal by the House of Commons’ Public Accounts Committee (PAC) on February 11, in the latest of a series of probes by the influential spending watchdog into multinationals' tax affairs.

The Government have said they cannot publish details of HMRC’s inquiry into Google’s tax payments, but Labour MP Margaret Hodge - former chairwoman of the PAC - called for greater transparency.

She said it was time for big companies listed on the London Stock Exchange to “open up these negotiations that they have with HMRC ... so you see the assets, you see the business that takes place here in the UK, we see the profits they make and then we can all judge that they pay a fair rate of tax".

Lady Hodge also urged Ms Verstager to take action while, in a letter to the EU commissioner, SNP economy spokesman Stewart Hosie said “independent verification” of HMRC’s deal with Google was needed to find out whether it “is a fair deal for the taxpayers of the United Kingdom."

Mr Hosie said there was "a palpable sense of scepticism" among the public and experts about the settlement, adding: "Working people and small and medium businesses do not have the luxury of negotiating down the amount of tax they have to pay - and we must now have independent verification that Google has not been extended that luxury by this Government."

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Writing in the Financial Times today, Google's vice president of communications and public affairs, Peter Barron, insisted the company paid UK corporation taxes at the standard rate.

He wrote: "As a US company, we pay the bulk of our corporate tax in the US: 3.3 billion dollars in the last reported year. What should Google pay in the UK? We pay tax based on the value added by the economic activity of our staff here, at the current standard rate: 20%.

"After a six-year audit we are paying the full amount of tax that HM Revenue & Customs agrees we should pay, including £130 million in additional back tax.

"Governments make tax law, the tax authorities independently enforce the law, and Google complies with the law."

Mr Osborne has been criticised for the way the news of Google’s agreement was announced, while he also came under fire for failing to attend the House of Commons to defend the deal earlier this week.

Fellow Tories Boris Johnson and David Davis have both spoken out against the deal.